Detroit Riverfront Conservancy Inc

“On may 14, 2024, the conservancy placed the organization's cfo, on administrative leave after discrepancies with financial documents were identified and thereafter, on may 31, 2024, the chief financial officer's employment was terminated for cause. In june of 2024, the conservancy engaged quatrro business support services as an outsourced accounting service provider to oversee its financial information. A forensic accounting firm was engaged to investigate and report on the financial discrepancies and a law firm has been engaged to assist with civil litigation against the former cfo. The conservancy also engaged a new independent audit firm to complete the financial statement audit for years ended december 31, 2024 and december 31, 2023.”

“During the current year, management identified material fraud committed by the former cfo. The cfo misappropriated approximately $42,500,000 funds over a period of more than 10 years. The organization has taken the following corrective measures described over the next several paragraphs. Detroit riverfront conservancy management's plan: the detroit riverfront conservancy has undertaken a sweeping set of governance and financial enhancements in response to the 2024 fraud, reaffirming its commitment to integrity, accountability, and public trust. These enhancements, developed with guidance from national experts and implemented by the board and executive leadership, are designed to protect the organization and restore public confidence. In addition, the conservancy has taken decisive financial and fundraising action to ensure the ongoing and future operations continue to be delivered without interruption while building the long-term sustainability of the organization. Background & immediate actions: after uncovering a major embezzlement scheme in spring 2024, the board acted swiftly engaging forensic auditors, legal counsel, and law enforcement. The perpetrator was prosecuted and sentenced to 19 years in prison, and civil litigation is underway to recover stolen assets. No other staff or board members were charged. The conservancy has since restructured its leadership team, welcoming new executives and board officers, and has a transition plan for all key governance roles by year-end 2025. The organization also completed the ralph c. Wilson, jr. Centennial park which opened in october 2025. Governance structure enhancements: following the fraud, the conservancy is reducing its board from 55 to 30 members, instituting term limits of three consecutive three-year terms, and enhancing member training and accountability. All standing committees, such as finance, audit, governance/nominating, advancement, and programs & community engagement have updated charters and annual reviews, and the litigation committee will dissolve once its work is complete. There are now formal succession plans in place to ensure leadership continuity and institutional knowledge. Increased transparency and public engagement will be promoted via sharing annual reports and providing open access to governance information. Financial controls enhancements: following the discovery of financial irregularities, the organization strengthened its financial oversight and governance practices. These measures include enhanced segregation of duties, improved review and approval processes, and engagement of new independent auditors. Additional measures include establishment of comprehensive audit trails for all financial transactions, engagement of an independent audit firm (not the current auditor) periodically to review internal controls, and an annual review of the conservancy's banking relationships. The organization remains committed to transparency, accountability, and compliance with all applicable standards. Financial updates and looking forward: over the last 12 months, the conservancy has completed extensive reviews of vendors, contracts, and expenditures which has resulted in significant cost savings to the organization's annual operating budget. In addition, the organization has received strong support from long-term and new funding partners, which has supported a measured fiscal approach through cash flow needs over the last 12 months. Going forward, the conservancy team will continue to diligently monitor the financial position of the organization with a focus on revenue strategy, expense management and cash projections. Active monitoring and regular reporting of financial health and outlook for senior leadership from the conservancy and appropriate board committees.”

“Detroit riverfront conservancy engages an outside cpa firm to prepare the form 990. The drfc audit committee reviews the full form 990. The governing board is provided access to a public disclosure copy of the return prior to filing.”

“Each voting member of the board shall sign a statement at or before the conservancy's annual meeting confirming the director understands and agrees to comply with the conflict of interest policy and shall complete and submit to the conservancy an annual questionnaire regarding his or her interest in matters in which the conservancy is involved. The statements are then reviewed by the governance coordinator and any significant items are discussed. A director in conflict may not participate in, or be present during, any deliberations or vote of the board of directors or any committee of the board of directors on the transaction or arrangement in which the interested person has a financial interest, whether or not his or her financial interest is in conflict with the conservancy's best interests.”

“The board used a process of benchmarking other similar non-profit organizations in the area to determine the compensation of the president and chief executive officer and other top management officials. The organization uses an outside firm to perform a comprehensive review of compensation for key employees as they are hired.”

“Form 990 is available by written request to the organization.”

“Mark c. Wallace, ceo, resigned on may 31, 2024 and employment of william smith, cfo, was terminated on may 31, 2024. Neither individual can be directly contacted at the organization's address via mail. However, management has the ability to contact both individuals if necessary.”

“2024 fraud loss -827,343. 2024 crisis cost -3,447,225.”

“A new independent audit firm has been engaged to complete the finacial statment audit for the year ended december 31, 2024. As of filing date of the federal form 990, the audit is still ongoing and is anticipated to be completed in 2025.”